The Absolute Chaos of r/Wallstreetbets

sponsored by nordvpn for a lot of people the stock market can be a lucrative endeavor in which they earn interest on a portion of their savings each year just set aside a couple of grand and if you've done your research after a few years watch it multiply or get de-listed and turn into dust but for some years are far too long to wait traders want their money today and throw thousands of dollars into stocks forex and options to get it on one side you've got the retail traders usually trading on the side of their main job these guys are normally pretty sensible clued up and use a detailed series of charts and strategies to predict where stocks are headed then you've got the professionals the institutional traders and bankers who have spent years studying markets and have access to bloomberg terminals walls of monitors and millions of dollars they spend hours charting and write full essays of due diligence before even thinking about going in cunning careful and calculated then there are the other traders of microsoft's ticker on a popular subreddit that's dedicated to markets it's discovered on reddit you can think of this similar to a sort of video game hack you put down a little bit of a deposit on margin and then you get infinite leverage getting people to take more risk than they want to here's what these kids are doing and they're psychopaths wall street bets an online message board so pungent with autism its members make the rain man look like james bond by turning stock options from a hedging strategy into a glorified bet thread people on the subreddit have managed to convert the entire stock market into their very own personal casino add that to zero commission brokerage apps available to everyone with a mobile phone lock everyone in their house for months on end and you've got an ungodly amount of people on board the process is simple you start your career by signing up to robin hood a zero commission online brokerage infamous for being absolutely terrible and breaking constantly oh lost twenty thousand dollars because of a problem on our end here's 75 compensation despite its problems it's still far better than questrade robin hood's the bottom of the barrel of brokers and as such usually attracts likewise traders but it just about works once you've signed up it's usually best to read up on trading terms so you have a shred of an idea of what you're doing but this stage is completely optional once you're on robin hood you're set it's time to lose money this usually starts by logging on to wall street bet the subreddit itself is home to a few things bull posts bear posts gains losses but mainly it's a bunch of [ __ ] posts and memes useful stock tips in actual thorough due diligence can occasionally be found however once located and after skim reading a few lines of it and glancing at some charts you've pretended to understand it's time to go all in the yolo the subreddit's signature move essentially an investment of all of the cash in your account once the cash is on hand it's time to suit up the weapon of choice almost always being options on spy a fund that tracks the overall u.s market what are stock options basically an option to buy or sell a stock at a specified price when you're buying a call option you're basically paying a premium upfront to bet that the value of a stock will rise to a certain price by a certain date the further the price goes beyond your selected strike price the more your calls worth but if it doesn't hit your strike price by the expiry date you're not paying this month's rent puts are the same thing but they're generally for when you think stocks are going to fall if an option hits your strike price or more you can exercise them to buy or sell the shares or sell the options on any time before the expiry now the nature of options allow for a huge potential and upside banking numerous people up to 10 times their investment but also losing others all of it there have been a few tragic losses but even for those that lose everything on wall street bets there's almost always another portion of grandma's pension up for grabs to head straight back in [Music] [Applause] [Music] it's 2012 and after being exiled from our slash investing for constantly pumping risky trading ideas reddit user u slash jartek decides to make a subreddit of his own and on january 31st wall street feds go is live it's not long before the subreddit adopts a 4chan like etiquette of calling each other retards and artists and casual mentions of cocholdria everywhere it's also not long before people on the subreddit start playing around with options and penny stocks the trades start out pretty tame but this doesn't last for long it's also worth mentioning that everyone on the subreddit was relatively competent with stocks and had some idea of what they were doing until 2015 around the time when robin hood starts to gain some traction from there it's not long before they find wall street bets the subreddit hits 10 000 members and the slow influx of robin hood traders begins naturally the quality of posts on the subreddit take a hit in late 2016 this influx only accelerates as wall street best starts to leak onto arsenal growing the sub to around 50k by mid-year by this point many of the original members had had enough and left the subreddit for good numerous events unfold over the next few years with users like wall street beds guard appearing claiming to have made eight million dollars from forty three thousand someone makes a hundred and ten thousand dollars completely by accident martin shkreli becomes a mod but by 2019 the sub had grown to 700 000 members and the autism was cranked up to 100 [Music] it's mid-january 2019 and reddit user iany mann decides to stray from the subreddit's proven strategies he's still trading options but this wasn't your usual options trade this was a box spread a highly complicated strategy that involved both buying and selling equal amounts of options at the same expiry and strike price and profiting by taking advantage of pricing inefficiencies box spreads are generally not very profitable and the commission charges slapped on top of them usually make them not even worth bothering with but irony man was on robin hood and robin hood doesn't have commission charges bingo time to go in now ironyman only has five thousand dollars in his account but by trading these box spreads he manages to take on around hundred thousand dollars worth of margin that's a leverage of sixty to one now obviously this should not be possible but irony man's strategy was so artistic that not even robin hood's risk management knew it could be done he'd also worked out that the box spreads were completely risk-free meaning he had no money at risk if those options remained unexercised in two years he'd make around forty thousand dollars he goes on wall street beds and shows everyone the results immediately realizing the inherent risk people tell him not to go through with it that there was risk involved that he was completely [ __ ] but any man had run the maths he had no money at risk it literally could not go tits up until people started exercising them see any man thought that for every call he sold being exercised he could exercise a call he purchased meaning a loss of only five hundred dollars per spread but here's the thing he sold 500 spreads on the same day he opened the spreads buyers began exercising them so many in fact the irony man had to close 283 spreads in one day naturally his margin called for a [ __ ] ton of money he doesn't even have sixty thousand dollars down and minus two thousand percent later robin hood actually realized what was going on and close irony man's account instantly box spreads were removed from the platform in a matter of hours so overall not a great week for ironyman but it turned out that before things went tits up irony man withdrew ten thousand dollars of the initial profit from his robin hood account meaning that while losing robin hood at least sixty thousand dollars and changing a major investment platform's rules forever id man had actually doubled his money [Music] before we go on browsing it's important we do it pretty much every day but what if people could see what we browse down to every blast detail well your internet service provider can as well as any hacker sharing an unsecured internet connection with your device all your precious info gone instantly enter nordvpn nordvpn encrypts your data at the source meaning those spying eyes don't have a chance it's simple they give you a map you click a country and you're off the grid instantly australia italy mexico your internet could be anywhere if you don't know how will they unlimited bandwidth super fast service it even works on six of your devices at once and nordvpn is 68 off using the link in the description that's 3.71 a month plus a month free 19 year old student anal farmer 2 starts out on wall street bets in 2018. his first post suggests he's new to trading asking where he should yolo is 5k how not to be so [ __ ] and so on fast forward to july 2019 and he's a grizzled veteran he's now got around a hundred thousand dollars in this robin hood account and he goes all in with it on short-term expiry calls on a company called the lion technologies it goes well and a day later he banks two hundred thousand dollars profit two days later and he heads back in the market had gone up yesterday so logically tomorrow it was going to drop he then yolos 170k on zero day expiry spy puts these puts expire the next day so naturally they're high risk high reward on the same day he buys them a rogue tweet from donald trump announcing a new wave of chinese tariffs causes the market to nosedive and he buys another 300k making his account worth almost 700 000 confident a market rally was on the cards for the day after anal farmer 2 then put 600k of the profit he just made into another round of zero day expiry options for tomorrow but this time there were calls he goes to bed but when he wakes up it's a hellscape a sea of red the market was down hard again and his six hundred thousand dollars was snapped out of existence instantly he sold the calls on for 100k leaving around 200k in his account it was okay he could make that 500k back with a few careful and strategic fast forward a week and it's down to 40 000 an investment of rope was tempting but anal farmer 2 wasn't done just yet all right one final yolo just need to find the right stock ah perfect he spots an august 14th earnings report for canopy growth corp and decides to put the entirety of his account on calls for it he goes to bed august 13th one day before earnings anal farmer 2 is currently up 8k things are looking good he goes to bed again he wakes up the next day again to a sea of red earnings was a complete disaster however anal farmer 2 is not selling for a loss and plans on sticking with the calls till the end it's generally assumed that he lost the rest of his account that week having made and lost seven hundred thousand dollars in three weeks anal farmer two decides to take a break from all street vets and hasn't been back much since [Music] a couple of months later and a guy called control the narrative goes in straight off the bat he borrows money via leverage through robin hood and loses 30 thousand dollars on options for microsoft's earnings report he makes a reddit post declaring the end to his trading career and that was the end of it until he came back three days later this time he's only got two thousand dollars but there's a twist turns out there's a glitch on robin hood and it gives you infinite leverage multiple others use this glitch to borrow money in the millions but control the narrative is sensible he only borrows enough to meet his personal risk tolerance fifty thousand dollars the loophole worked by applying for two to one leverage via robin hood gold a monthly subscription service which requires a minimum of two thousand dollars in your account check because he has two to one leverage he now has four thousand dollars buying power control the narrative then buys a hundred shares of amd stock he pays three thousand two hundred dollars for the shares with almost half of that being leveraged he then goes to robin hood's option market and sells amd calls turning over his 100 shares and receiving a premium of 3 200 he'd essentially laundered the leverage robin hood had given them access to into a tangible cash balance in his account and since he has robin hood gold and his leverage is two to one he now has access to eight thousand dollars rinse and repeat until he hits fifty thousand dollars his personal risk tolerance he then bets every single penny of that on apple puts days before an earnings report expecting bad news earnings day finally arrives and tim apple smiles as he uploads apple's quarterly financials christ they'd smashed it control the narrative loses 25 times his entire account in an instant prompting his soul to leave his body live on camera it wasn't long before the leverage loophole was fixed robin hood would then go on to wall street vents to clarify their policies on margin and state that anyone found abusing systems on robin hood would have their account closed they were banned from the subreddit instantly but while wall street bets was busy spreading the ashes of control the narrative a few bears had spotted something brewing on the horizon [Music] february 2020 the dow jones index is riding at an all-time high and wall street best now has almost 900 000 members at the same time things were happening in china they weren't good a new coronavirus was springing up all over wuhan and it was spreading fast china locked down the city and told everyone that everything was just fine turns out it wasn't fast forward a few months and almost the entire world has it and it's still spreading after infection starts springing up in europe in america governments cave in one by one all right boys time to close shop bears on wall street bets had struck it big and while infections continued to spread bears were rubbing their hands together these puts were going to print nicely and they did in march the u.s market fell by almost 30 percent but the lockdown was expected to [ __ ] the economy for years bears were certain the worst was year to come so the mission was simple load back up and puts and head straight back in kovid was getting worse rent wasn't being paid and unemployment numbers were skyrocketing once again he literally could not go to hit up they hadn't taken into account one thing however a booming market was trump's golden ticket to a re-election in 2020 and he wasn't just gonna let it slip into the gutter and so began the pump the head of the federal reserve tyrone powell is tasked with keeping the stock market afloat a feat that seemed almost impossible under the current circumstances but then something incredible happened by pressing a simple button jerome powell discovered something fascinating a real-life infinite money glitch one that was yet to be patched turned out that the fed has a money printer and it printed money the recession was cancelled instantly in late february the us government had pledged 2.5 billion dollars to fight the coronavirus but by mid-april they'd burnt through more than six trillion dollars the fed pledged a two trillion dollar stimulus package as well as announcing unlimited purchasing of government bonds emergency attendee packages at twelve hundred dollars were also deployed the results were incredible forty million unemployed the market's up one hundred thousand dead worldwide priced in almost one trillion dollars added to the national deficit in one month spy 300 by simply taping the print button down j pal had ended the crash instantly and the world's financial systems back to normal for good and thank god for us excessively printing money to counterbalance economic issues has never had unintended consequences bears were absolutely brutalized tens of thousands of puts reduced to ash instantly people on the subreddit would continue to remain bearish for a couple of months but as things worsened and the market kept rising one by one they fell by late may it was over even with 40 million americans unemployed the nasdaq had surpassed even the pre-crash peaks of late 2019. the dow jones index wasn't far behind the bears had lost [Music] it had been a rocky few months for the world in general but things were finally improving the economy had made a full recovery the virus had completely gone and the world was back to normal [Music] [Applause] [Music] [Applause] [Music] [Applause] you

Channel: big boss

Views: 3,384,451

Rating: 4.9210792 out of 5

Keywords: big boss, the absolute chaos of r/wallstreetbets, wallstreetbets, r/wallstreetbets, wall street bets, wallstreet bets, yolo, stonks, stonk market, robinhood, robinhood trading, robinhood fail, yolo life savings, life savings, life savings stock market, losing life savings, stock market fail, lost life savings, infinite leverage, reddit wall street, reddit wallstreetbets, robinhood glitch, robinhood losses, wall street, wallstreet, guh, wsb, r/wsb, wallstreetbets yolo, wsb yolo

Id: jg85H26wyLk

Length: 18min 16sec (1096 seconds)

Published: Mon Aug 17 2020

Reddit Comments

[u/BMCarbaugh]

I can't remember the specific company, but I remember earlier this year there was some stock that plummeted to the tune of a few hundred million because a bunch of people misread a press release and mistook Company A for Company B.

Stuff like that makes you realize how detached from reality the stock market really is.

[u/Electricfox5]

Guh

[u/IamParticle1]

PLTR to the moon 🚀🚀🚀

[u/Careful_Description]

Why are they losing their money and meeting up on reddit to meme about it?

[u/Mackinstyle]

I put $100 into Wealthsimple and bought a ton of nonsense penny stocks. I'm having so much fun watching them go all over the place and fake flipping tables when I lose 10% in a day.

I can't believe people do this as a way to make a living. That's too much for me.

[u/uniqueusor]

I thought that sub was complete bullshit, a farce. Am I to believe that people are not just making shitty memes over there but they actually lose money?

[u/mygrossassthrowaway]

Good video, uncomfortably close to an internet historian vid.

[u/Gcons24]

As a WSB user, I feel attacked, offended and it's all totally correct

[u/dethb0y]

Degenerate gamblers gonna degenerately gamble.